Entertainment Morgan Stanley on the market situation: It is like the dotcom bubble

06:47  22 july  2021
06:47  22 july  2021 Source:   finanzen.net

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The situation in the US stock market is similar situation before the bursting of the dotcom bubble in 2000. This view is certainly Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

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Corona crisis drove prices up tech

Lisa Shalett sees danger for the broad stock market

similarities to the dot-com bubble highlighted

Numerous tech companies were from the Corona crisis benefit. For one, it's because that digitization was clearly driven by the effort to avoid contact. Secondly, the international central banks in their efforts to mitigate the economic consequences of the corona crisis, extremely loose monetary policy. From the low interest rates particularly tech companies benefit because they show a relatively high level of leverage in the rule.

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The asset management expert Lisa Shalett sees an increasing threat against this background that could lead to a 15 percent correction in the stock market. This was reported by "Markets Insider", citing a letter from the banker. 15 percent, that's exactly Plus, which of S & P 500 , reflecting the broad US stock market was able to achieve since the beginning (as of 21/07/2021).

High rating

The Morgan Stanley -Bankerin justified her warning with very high valuations that tech stocks were able to achieve thanks to the low interest rate policy of the Fed. Thus the price-sales ratio was (price to sales ratio) now grown in the tech sector to a level that had not been seen since the peak of the dotcom bubble in the year 2000th

This also represents a danger for the broad stock market, because as Shalett explained, have tech stocks now a much greater weighting in the S & P 500, when they had it in the year 2000th So the tech papers were responsible for the price-sales ratio for the S & P 500 currently is higher by 50 percent - higher than ever before.

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More prone tech sector

"The problem with the current situation, profitability and profits are the tech sector vulnerable" explained Shalett. Thus, the sector see with headwinds on an unprecedented scale confronted - ". " As by rising input costs, a weaker


, tougher competition, higher taxes, more stringent regulation and critical customers already in the past two months described strives the market continues becomes increasingly unclear in small increments to record highs, while the narrative. Therefore, the risk increases a correction to, "said Shalett.

Thus, investors should act now

investors advises Lisa Shalett now to focus their investment decisions on fundamental result data. Also, might consider investors, if they are not financial titles in her want to pick depot to get abzusichern.Redaktion against possible interest rate increases finanzen.net

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